Finning International (FTT) Q4 2024 earnings summary

Executive summary

• Net revenue for FY 2024 grew 6% year-over-year to $10.1 billion, with Q4 net revenue at $2.6 billion, up 7% from Q4 2023, and international revenue up 9%.

• Q4 2024 EPS reached a record $1.02, with full-year adjusted EPS at $3.80; Q4 EBIT was $223 million, up 26% year-over-year.

• Free cash flow for 2024 was $865 million, with Q4 free cash flow at $399 million, both significantly above net income.

• Equipment backlog ended the year at $2.6 billion, up 27% year-over-year, driven by mining and power sectors.

• Shareholder returns included $322 million in share repurchases and $151 million in dividends, with 23 consecutive years of dividend growth.

Financial highlights

• Product support revenue grew 6% in Q4, led by South America; new equipment sales rose 12% in Q4, while rental revenue declined 14%.

• SG&A as a percentage of net revenue reached a record low of 16.3% for the year and 16% in Q4.

• Q4 2024 EBIT margin was 8.7%, with South America at 10.9%, Canada at 8.1%, and UK & Ireland at 5.8%.

• Gross profit margin for Q4 was 24.5%, down 140 basis points year-over-year due to a higher mix of lower-margin mining equipment.

• Adjusted ROIC for Q4 was 17.6% consolidated, with South America at 25.9%, Canada at 15.1%, and UK & Ireland at 11.5%.

Outlook and guidance

• Focus remains on maximizing product support, driving resilience, and growing used, rental, and power businesses to improve ROIC.

• South America outlook is strong, supported by copper demand and robust mining activity, but faces labor market challenges.

• Canada outlook is mixed, with stable product support demand but uncertainty from government policy changes and tariffs.

• UK & Ireland expect soft construction demand but resilience in product support and growth in power systems.

• 2025 capital expenditures and rental fleet investments are expected to exceed 2024 levels to support growth.